CVP Analysis, Income taxes. - StudentOfFortune.com

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tdiekmeyer
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$5.00 CVP Analysis, Income taxes.

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Due on Nov. 20, 2008
Asked on Nov 19, 2008 at 1:17:49PM

Q:
Diego Motors is a small car dealership. On average, it sells a car for $25,000, which it purchases from the manufacturer for $22,000. Each month, Diego Motors pays $50,000 in rent and utilities and $60,000 for salespeoples salaries. In addition to their salaries, salespeople are paid a commission of $500 for each car they sell. Diego Motors also spends $10,000 each month for local advertisements. Its tax rate is 40%.
1. How many cars must Diego Motors sell each month to break even?
2. Diego Motors has a target monthly net income of $54,000. What is its target monthly operating income? How many cars must be sold each month to reach the target monthly net income of $54,000?

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fschulz
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Posted on Nov 19, 2008 at 1:41:43PM

A:
Preview: ... er commssion per car)= 25,000 - 22,000 - 500 = 2,500

To break even you ...

The full tutorial is about 61 words long .

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Neo
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Posted on Apr 27, 2009 at 07:41:57PM

A:
Preview: ... see attached.
< ...

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